PepsiCo CEO Indra Nooyi says she didn’t want a short-term ‘cut, slash and burn’ policy that would have seen the company make enormous earnings from 2006 despite the upset her long-term nutritional foods focus caused some investors.

“I remember going to Boston for an investor show and one particular investor…just took me to the cleaners, said ‘Who are you, Mother Teresa? We are American. We eat chips and drink soda!” she told David Bradley.

Interviewed by Bradley, who chairs Atlantic Media Company, at the Aspen Ideas Festival on Monday, Nooyi spoke of the challenges her role involved, as a woman leading a company with 300,000 staff and almost $30bn in revenues. She even cracked a joke about using drones to deliver Pepsi to people’s homes.

“What’s new in what we like in beverages and food?” Bradley’s open-ended question saw Nooyi reflect on the shifting soda and snack landscape.

“Clearly there’s a health and wellness trends and…focus for all consumers,” she said. “But what health and wellness means is what’s a really confusing aspect today.”

If you’d asked Nooyi 5-7 years ago she would have said that people were focusing on zero-calorie and lower-calorie products, and were switching away from high calorie products.

But over the past couple of years people had taken industry by surprise, ditching diet products because they don’t like artificial sweeteners, she added.

“I don’t know why because nothing has been written about them not being safe. They’re just fine. But people are not consuming products with artificial sweeteners. They’re going back to consuming real sugar products,” Nooyi said.

Before the interview Nooyi said she saw a woman read the nutrition label on a can of EZEE. “People are looking for natural organic labelling, and they’re looking for non-GMO labelling,” she said.

“Now some of it is just myth because GMO, nothing is wrong with it, and I don’t know why people worry about those sorts of issues.

“But we’re seeing people because of the media, because of the blogs, afraid of the food system.

But Nooyi insisted that the US has one of the safest food supply systems in the world – while products are being reformulated to cut calories and include healthier ingredients.

‘You can, cut, slash and burn’, or plan for PepsiCo’s long term...

Nooyi also defended her own record at PepsiCo and what Bradley alluded to as her “rearguard action” that started with the purchase of Quaker Oats for Tropicana and the goal of doubling nutrition food sales from $15bn to $30bn by 2020.

“A group of rump investors, largely back in 2012, decided that Indra’s focus on nutrition, on sustainability, on the future, was a fussy sacrifice to short-term profits,” Bradley told the audience.

Addressing this comment, Nooyi said: “For five years, in a big company like PepsiCo, you can cut, slash, burn, make enormous earnings and then let the next person pick up the debris of what you left for them.”

But she insisted that she wanted PepsiCo to survive longer, and from the start of her tenure as CEO in 2006 noticed health and wellness as a trend, the CSD decline and the fact that, as a major plastic producer and water user, the firm had to change its business model to be more environmentally sustainable.

“We were a company making carbonated soft drinks and potato chips and corn chips – fabulous products. Tasted great, brought a smile to people’s lips – but society was changing.”

This meant a changed model for PepsiCo that those familiar with its business for the previous 20-30 years found challenging, Nooyi said – since it involved cutting sugar in soft drinks and salt in snack products.

Key events included an April 2010 speech at the Economic Club of Chicago where Nooyi unveiled plans to expand healthy brands such as Quaker and Tropicana, and a pledge to stop selling full-sugar drinks in schools by 2012.

“It was not easy…I struggled with those decisions because we always had a group of people inside PepsiCo who questioned those decisions. Let alone investors,” Nooyi said.

Recalling her exchange with that angry investor in Boston who criticized her nutritional focus, who we quoted above, Nooyi relayed more of his words to the audience.

“It’s not your business to transform the company to healthy offerings. If we want to own a company that makes nutritious beverages and snacks, we’ll go and buy a nutritious beverages and snacks company stock’,” he said.

“I said, ‘What about PepsiCo and our future?’” Nooyi said.

This content is copyright protected

However, if you would like to share the information in this article, you may use the headline, summary and link below:

PepsiCo CEO Indra Nooyi says she didn’t want a short-term ‘cut, slash and burn’ policy that would have seen the company make enormous earnings from 2006 despite the upset her long-term nutritional foods focus caused some investors.

Related products

On-Demand Supplier Webinar

06-Feb-2015 - The Coca-Cola Company invested in Chicago-based co-operative Fairlife LLC in December 2012, and since then the company’s star has only risen further. Here, CEO Steve Jones introduces the company and its mission, looking at trends in dairy and the ‘protein...

On-Demand Supplier Webinar

06-Feb-2015 - Stand out in the competitive beverage marketplace and satisfy consumers’ thirst for fun by adding the creamy, smooth mouthfeel and visual appeal of foam and froth. Using naturally sourced foaming agents, you can add superior, long-lasting foams to a variety...

On-Demand Supplier Webinar

06-Feb-2015 - Ingredients such as chia, ancient grains and flaxseed have captured the interest of health-conscious consumers, and more and more beverage companies are taking notice. But where to begin? Long-time beverage ingredient innovator and turnkey formulator Glanbia Nutritionals will offer insights...

On-Demand Supplier Webinar

06-Feb-2015 - We interrupt this webinar to bring you breaking news in functional beverages. Only on AIDP News Channel will you hear from experts in the field of functional beverages. AIDP is known as being an innovator in function and our top...

On-Demand Supplier Webinar

08-Jan-2015 - What are the fastest-growing beverage categories and which consumer trends are successful firms tapping into? ‘Real’ sugar? Fermented beverages? Plant waters? And how are companies such as Keurig changing the beverage landscape? Hear from a beverage entrepreneur, a retailer, a...

On-Demand Supplier Webinar

08-Jan-2015 - Just as with the search for the Fountain of Youth, The Lost Arc or the Meaning of Life; the Holy Grail of functional beverages seems to be an ongoing quest that few of us have been able to conquer, until...

On-Demand Supplier Webinar

08-Jan-2015 - Social media has forever changed the way consumers talk to one another (and the way companies and consumers talk to each other, too). Find out how you can use social media to take your beverage business to the next level.

On-Demand Supplier Webinar

08-Jan-2015 - With annual sales approaching $9B, the US protein beverage market is thriving. The category has quickly become a destination for busy, health conscious, active consumers of all ages. Capturing mainstream consumers can be lucrative for marketers, but one that...

On-Demand Supplier Webinar

08-Jan-2015 - FoodNavigator-USA & BeverageDaily have gathered together CEOs from some of the most innovative beverage companies in the US from Mamma Chia and KeVita to Vertical Water and KonaRed to discuss growth opportunities in the beverage aisle; how difficult it is...

Clinical study

01-Mar-2015 - Looking for an ingredient that can deliver serious hydration, endurance and recovery benefits for your next sports bar, beverage or supplement? Sustamine® is a science-supported ingredient that can: enhance electrolyte and water absorption in the intestines; stimulate glycogen synthesis; inhibit muscle...

Data sheet

24-Feb-2015 - The 2015 Sweetener360: Are You Marketing to Buzz or Behavior?With over 15,000 consumers surveyed, we’ve validated our findings from 2014—what consumers say and what they do don’t always align. Take a look at the 2015 Sweetener360 SlideShare deck for these...

Technical / white paper

23-Feb-2015 - Understanding worldwide consumer needs to create successful food & drink productsClean Label has been the top theme in the food & beverage industry in the last years – and it is still growing in importance. But what exactly does Clean...

Data sheet

24-Jan-2015 - BioNeutra is the largest supplier of isomaltooligosaccharide (IMO) in the North American and European markets. Our VitaFiber™ ingredients provide dietary fiber, prebiotic function and a natural sugar-like taste all with a low caloric value! VitaFiber™ is available in both powder and...